Introduction To Programmatic Advertising

Introduction To Programmatic Advertising

Programmatic advertising promises to make advertising more targeted and relevant, while simultaneously making the media buying process more efficient. Programmatic combines the power of technology and data to automate the media buying process, eventually enabling a brand to easily and affordably reach its target audience. It has gradually evolved from a way of using up remnant ad inventory to a more sophisticated process.

Essentially, programmatic is the process of buying digital advertising space using computers and then relying on data to decide which ads to buy and how much to pay for them, often in real-time. It enables marketers to deliver the right message to the right consumer at the right time.

Programmatic advertising differs from traditional media buying in a couple of ways.

In traditional media buying, digital ads are bought and sold manually by ad buyers and publishers. The buying process involves salespeople, request for proposals, etc. Tracking results in this process is a little cumbersome because data is scattered. People have to manually gather the data from various sources and then analyze it. It’s a slow and tedious process, more expensive and creates room for human error. Programmatic reduces human error; is automated and fast. Advertisers can view their campaigns in real time and optimize them midway to make sure their money is being used as effectively as possible.

The current programmatic landscape

As per Zenith’s 2016 Programmatic Marketing Forecasts report, programmatic will become the method of choice for trading digital display ads, comprising 58% of spends in 2017. The US is the biggest market for programmatic, worth $24 billion in 2016, accounting for 62% of total global programmatic ad spend. Programmatic adoption in Asia Pacific is on the rise, according to a 2016 study conducted by Forrester Consulting on behalf of MediaMath.

Challenges to overcome

In fact, in a 2017 podcast interview ‘The State of Programmatic in Southeast Asia’ with Anna Chan of Amnet Asia revealed that advertisers in Southeast Asia are yet to realize the full potential of programmatic. Chan said advertisers face a key challenge when it comes to leveraging programmatic to drive business results: a lack of understanding of programmatic and its benefits. The industry needs to start having a conversation about programmatic in a language devoid of jargon. It’s one way to tackle the slow adoption rate. We need to educate clients and advertisers about the benefits of programmatic and change mindsets across the region. That said, Asia Pacific remains a high-growth region for programmatic.

One of the other big issues is bad user experience, which can be tackled by header bidding—a technology that’s set to improve the programmatic user experience. In regular programmatic advertising, marketers start bidding for a user impression, and if the price is not met, then that same impression is offered to another ad exchange. This occurs until the price is met. Users may get frustrated with the process because of long page load times. Unlike this waterfall method of buying and selling inventory, header bidding means all bids are made at once. It additionally allows for more control and greater bid transparency for reporting and optimization.

Programmatic is one of the fastest-growing areas of digital advertising. Follow our posts as we break down the different types of programmatic advertising you need to know.